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Indian armed forces upset as Modi govt imposes curbs on car sales at military canteens

New order sets price cap for cars that can be bought by armed forces from subsidised canteens. Many see this as ‘ill-treatment’ while jokes target military brass.

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New Delhi: Serving and retired military personnel are upset over the newly-introduced price cap for armed forces personnel purchasing vehicles from the subsidised Canteen Stores Department (CSD), with many seeing this as “ill treatment”.

Coupled with other lingering issues like the Non-Functional Upgrade, anomalies in the 7th Central Pay Commission, and, of course, the opening up of cantonment roads for general traffic, the new order has led to many social media jokes and memes directed at the military brass.

According to a letter issued by the Quartermaster General’s Branch at Army Headquarters on 24 May, starting from 1 June, only vehicles with an engine capacity of up to 2,500 CC and costing up to Rs 12 lakh (excluding GST) would be available through CSD for armed forces personnel in the pay level of 10-18.

So far, there was no limit on the capacity or price of vehicles that could be purchased through the CSD.

The frequency of purchase has also been reduced to one vehicle in eight years. Until the new rules kick in, the frequency stands at once in four years.

Those in the pay level of 3A to 9 can purchase vehicles with a capacity of up to 1,400 CC that cost within Rs 5 lakh. The purchases can be made once during service and once after retirement, with the gap being eight years.

Military personnel along with civilians working in the defence establishment get an exemption from GST on the value of the car in addition to the regular cash benefits.

Veterans demand rollback

The Indian Ex-Servicemen Movement (IESM), which is leading the campaign for One Rank, One Pension (OROP) and is one of the biggest groups of former servicemen, has written to the Army headquarters, calling for a rollback.

“The MHA (Ministry of Home Affairs) has put no such restriction on CPOs (Central Police Organisation) for the purchase of car [sic],” the IESM has written in its letter. “Defence Personnel feel that they are being degraded, downgraded and ill-treated as compared even to the CPOs in their socio-economic status.”

It added that the new policy is against the terms and conditions of service.

“The customers are paying cost of the vehicle before delivery, then what is the need of funds. CSD neither purchases cars nor stocks cars like grocery items,” it said.

“Implementation of new policy will adversely affect the moral [sic] of defence personnel as well as their efficiency since you are withdrawing the facility already granted to then,” the IESM added.

Brewing resentment

The new policy has led to lot of resentment in the armed forces, especially among the youngsters.

Intensifying the jokes and discussions against the rule within the military fraternity is the fact that outgoing Indian Navy chief Admiral Sunil Lanba recently bought a brand new Jeep Compass.

The engine capacity of Jeep Compass ranges between 1368 cc (petrol) to 1956 cc (diesel), with the SUV commanding a market price of over Rs 15 lakh.

Military officials, especially the younger ones, generally like to drive SUVs, and one message doing the rounds on various military WhatsApp groups is that only vehicles from the Indian carmaker Mahindra would now make the cut.

The letter written by the veterans’ group also dwells on this, noting that, with the current financial status, earnings and aspirations, officers looked to buy cars in the range of Rs 15 to 20 lakh. The policy caters to this range as of now as the GST rate is 28 per cent.

“However, apart from annual increases in price every year and with the coming of BS (VI) engine in April next year the prices are going to increase. Vehicles like XUV 500, Jeep Compass, TATA Hexa, TATA Harrier which are the preferred vehicle, will become out of reach because of the price limit given in the policy,” the letter said.

Speaking to ThePrint, a young officer said, “There are only a few things that the uniform gives us besides the joy of serving the nation. Why take away such small facilities being extended to us?”

Major General Satbir Singh (Retd) said he worried for the future of the Indian Army with such facilities being taken away.

“We are trying to attract more and more young men to the armed forces. But if we continue to downgrade, degrade and ill-treat the uniform, why would anyone join?” he added.

Also readArmy chief’s proposal an attempt to cut expenses or diversion from real issues?

Budget concerns

In a report about the new order, news agency ANI pointed out that buying a car from canteens run by CSD allows defence personnel to save at least Rs 75,000.

Last year, CSD sold cars worth Rs 6,000 crore. But, according to the report, the heavy volume of transactions resulted in a carryover liability of Rs 4,500 crore to car manufacturers.

With the new restrictions, the Indian armed forces are aiming to control the expenditure of the CSD canteen in order to prevent the budget from being overshot.

Every year, Parliament sanctions almost Rs 17,000 crore to CSD, which negotiates prices for the products it sells and then claims a 50 per cent GST rebate on the reduced prices from the government.

While CSD canteens generate a profit of Rs 500 crore, the 50 per cent GST rebate is often seen as a loss to the exchequer by finance authorities, ANI quoted an unnamed Indian Army official as saying.

“From 2008, purchase of cars through CSD has also being extended to other ranks, which has resulted in major portion of CSD budget getting directed towards cars and other high value AFD (against firm demand, products like TVs, ACs) items,” the 24 May order read.

“In order to regulate and balance the budget of the CSD, it has been decided to restrict the expenditure on purchase of cars…” it added.

Also readNarendra Modi govt wants a strong military, but its defence budget can’t guarantee that

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  1. I also support the aim of Modi government . But this govt. can’t be able to digest the small happiness of JAWAN . Government desire , ” why a jawan’s family ride on safest car on busy highway , so limit is only 5 lacs” .
    This Government gives increased payment on left hand and take it out from right hand .
    Newer want to think about jawaan .

  2. I also support the aim of Modi government . But this govt. can’t be able to digest the small happiness of JAWAN . Government desire , ” why a jawan’s family ride on safest car on busy highway , so limit is only 5 lacs” .
    This Government gives increased payment on left hand and take it out from right hand .
    Newer want to think about jawaan .

  3. A fauji should be able to walk into any car showroom, prove his credentials and eligibility against rules (verifiable), buy any car of his choice with the GST benefit (capped if deemed fit) subsidy being credited to his aadhar linked pension account. Just eliminate CSD in the chain, forget their negotiated price which only leads to corruption. That’s efficiency and ease of doing business. 🚘✅

  4. Defence personnels work for nation….. there salary should be tax free but instead governments is more interested in giving tax free income n rebates to ministers of whom many r corrupt… n now his facilityis alsotaken away…. this is really moving away from resoecting army to punishing them after elections r over.

  5. I would appreciate if the same can be passed on to the car manufacturers to price it accordingly.
    I was planning to change and hanging upside down

  6. It’s very sad to see ,how army policies are discussed in public domain same as it’s demoralizing for the forces , who are told that they are supposed to live away from families , maybe killed in action but they are not allowed to buy a car of their choice which is mid range , what nowadays young people starting work with a decent salary buy…

    Wonder if young india will want to join the forces ….

  7. This news whoever is totally negative from CSD lot of item is going to civilians, restriction is must and below officers rank why the years of purchase is different, it must be same. The anti Modi media is very active in this news. Donot have any good news?..

  8. Sad to see the last bastion of National Strength being reduced to a rag tag organisation and made a laughing stock in public domain.
    Mr Modi seems to be ill advised in his Strategic Perspective of developing Nation Power. The Chief and other Senior Officers who are expected to add grace and value to the chair they occupy and office they hold have never before in the history of the Proud Indian Army been looked down upon with disdain by all concerned.
    Weakening the moral is not in organisational interest nor in national Interest.
    This order needs to be reversed, the sooner the better.
    The Apolitical nature of the Indian Army must be maintained by all Govts.
    Budget for CSD needs o be increased keeping in mind the increased numbers of Veterans. Additionally, CSD needs to be freed from the shackles of bureaucratic controls and made financially independent. Or closed and Shopping cards be provided to all ranks for making purchases from open market a %of which can go to the defence welfare fund and distributed to units by the AG. The I cards should be sufficient to meet this requirement.

    • I completely agree with Brig Pradeep Sharma.
      The brewing resentment luld grow and finally culminate into a very damaging situation.
      As it is DA/DR has been curtailed till Jul 2021. The other side they have sanctioned a budget of 20 lakh crores. I fail to understand the hypocratic strategy by the govt. This has added to the other cuts on serving and ex defence personnel badly. I worry this could raise red flags in the defence functioning of it continues. Govt should consider looking into this.

  9. Anti army govt…1400 cc car earliar jawans could buy Honda city… Now they can’t even buy dzire…. Officers 2400cc is joke… Under 12lakh you won’t get car above 1600 cc.. Ias controlling govt is trying demotivate army

  10. There already exists a limitation of 2500cc for purchase of cars for officers. The article wrongly mentions that there is no cap on engine capacity as of now.
    That said, Modi govt’s treatment of defence forces and their veterans will always be an indelible blot on his prime minister tenures. Unfortunately the defence personnel don’t constitute a viable vote bank for BJP to care enough for them.

  11. Hope people who matter understand the feeling of a soldier…
    “I want to quit at the earliest not because of you taking away the petty privileges but because my country has started questioning it. God bless my country! – Jai Hind”

  12. Don’t blame the government, fault is of the service chiefs,for not standing up for the interest of their personell. The lure of becoming a governor?

  13. It is a joke of jawans. Jawan can purchase only car upto 5 lakhs. It is a disgrace for jcos and jawans.

  14. And no reduction in entitlement of four wheelers for IPS or other Paramilitary personel who get similar rebate from Central Police Canteen..! Shame on Generals ..Who are just licking boots of Bureaucracy and Political Masters for personal Governor, High Commissioner and other such posts… seriously how low will they stoop. Jai Hind..!

  15. Why this newspaper is printing so much negative news ? Are you guys running any propaganda against Modi Govt ? Do you guys even understand the budgeting and monetary policy ? Why printing so much negative issues ? Don’t you love your country ? This is not Journalism but frevilous way of inciting discontent among army men.

  16. 2500 cc car within 12 lac! Has UPSC Stopped using intelligence as a criteria while filling military vacancies. desicion makers are far from realising that on field patriotism needs to be fed with material backups…like these petty facilities of car thru csd. Deficiencies breed corruption…. and corrupted will to die for nation is a dangerous proposition to reach. We are working steadfastly in that direction…. Shun the uniform, marry a sc/ st and woek in the civie street where money buys law n order. Thats what works in this country.

  17. So the general will drive an Ertiga and the two bit politician ( MLA) will drive a Fortuner? Who will join your army? The general commands equipment worth hundreds of crores . So you are inducing corruption automatically. There was a systematic degradation of status of army officers by Nehru which culminated in 1962 debacle. No one reversed the process. Risk your life for a few days to understand what these guys do . Sadly, they don’t vote for their salaries. So five years as MP/MLA entitles to a lifelong pension. But a benefit of 75 k on a car for someone who risked bullets for 20-30 years is a burden. That to once in 7 years!!! 10k per year!!
    People had money for NYAY . Not for this. Shame on you. Show us what you do in parliament on article 370 or 35 A, before you do this.

  18. Just like ‘Jai kisan’, ‘Jai jawan’ too is now seen as an irrelevant slogan… one whose time is past. This has been very evident in the government’s attitudes and actions. No wonder the Indian armed forces have a problem getting youth to join as officers.
    Why is it that the NSG (black cats) is not seen as a loss to the exchequer by finance authorities?? Why do so many people need top notch security at the expense of which is paid for by the ordinary citizens of India??

  19. There are increases in price of vehicles every year. This year, in October, certain safety features become mandatory. On account of subdued market conditions, automobiles are likely to absorb the associated costs.
    In April next year, BS-VI norms kick in. This requires costly upgrade to the engine, which has evem made the diesel engine unviable for small cars. Cost of implementation the new safety norms (October this year) and making engines BS-VI emission norms compliant (from April 2020) will push up vehicle prices between 10 to 15%.
    For a vehicle now costing Rs 12 lakhs, the price increase would be around Rs 2 lakhs.

  20. Giving lifelong pension to an MP who has not even completed a 5 year Parlimemtary term is not seen as a loss to the exchequer by finance authorities!! However, the 50% GST rebate given to service personnel is seen as a loss to the exchequer!! Defies logic.

    • If there really was financial stress, what was the need to implement the 7th Pay Commission?? For political gains??
      If giving lifelong pension to an MP who has not even completed a 5 year Parlimentary term is not seen as a loss to the exchequer by finance authorities, why is OROP viewed as unviable??
      When the cost of Z+ and Z level NSG (black cats) security to thousands of persons in the country is not considered a loss to the exchequer by finance authorities, why is the 50% GST rebate given to service personnel via CST seen as a huge burden??

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